[Congressional Record Volume 147, Number 124 (Friday, September 21, 2001)]
[Senate]
[Pages S9589-S9604]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AIR TRANSPORTATION SAFETY AND SYSTEM STABILIZATION ACT
The PRESIDING OFFICER. The clerk will report the bill by title.
The bill clerk read as follows:
A bill (S. 1450) to preserve the continued viability of the
United States air transportation system.
Mr. DASCHLE. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. Who yields time?
The Senator from Missouri, Mr. Bond.
Mrs. HUTCHISON. Mr. President, parliamentary inquiry.
Mr. BOND. Mr. President, I yield to the manager of the bill, the
distinguished Senator from Texas.
Mrs. HUTCHISON. Mr. President, are we now on the bill and into my 30
minutes of time?
The PRESIDING OFFICER. The Senator is correct.
Mrs. HUTCHISON. Thank you, Mr. President. I yield 5 minutes to the
Senator from Missouri.
The PRESIDING OFFICER. The Senator from Missouri.
Mr. BOND. Mr. President, I thank the Senator from Texas for yielding
me time. Let me try to be quicker than 5 minutes.
No. 1, while this package may not be what anyone likes, I am sure in
this body and the other body there are probably 535 different ideas as
to what we need to do. I hope we can come together, the House and
Senate, and decide that we must move. I am more than willing to take
what has been put together as an emergency measure and urge my
colleagues to support it, and to support it without amendment.
We are looking at a situation where the airline industry, which is a
critical element in our economy, is right on the verge--from the
smallest airlines that need an immediate infusion of cash to make up
for the losses that were sustained when the Federal Government
rightfully shut down air transportation this past week, to the current
time where consumer concerns over safety have limited the flying
public. We have put our entire airline industry at great risk. This
bill is necessary if we are to solve those problems and if we are to
get the planes back in the air.
I can understand what my colleagues in this body and the other body
have raised as concerns about insurance and compensation for those who
are out of work. Let me be clear; it is not just the airline industry
which has suffered losses. Boeing laid off 30,000 workers. I have just
talked to people in the travel and tourism industry and consumer
products industries. They have suffered a great downturn, and there may
be people out of work. The good news is we have in place statutes and
programs designed to assist those people.
Let me be clear; if we delay passing this bill, as we attempt to
craft a change or adjustment on assistance for laid-off employees, we
risk causing a tremendous economic calamity.
I understand that in the House objections over the failure to include
relief for unemployment led to objections that put the passage of this
package in doubt.
Right now, we are looking at layoffs in the airline industry in the
neighborhood of 20 to 25 percent. If we do not pass this bill, we are
looking at 100-percent layoffs. We are looking not only at disaster for
those people who work in the airline industry, those of us who depend
upon airline traffic to get back to our constituents, those who depend
upon airline travel for business, for recreation, and for tourism, but
a risk to the entire economy. So this bill needs to be passed.
Let me also point out that last week I was in this Chamber and I said
that one of the key things we must include in the airline rescue
package is a carefully crafted, structured means of providing
compensation to the victims. There is a two-part means of providing
compensation for the families of those who are deceased as a result of
the accident and those who are injured. There are various provisions
built in which would seem to make an option of two structures
available, and there is a clear-cut indication that airlines will be
liable only up to the limits of their existing insurance coverage.
I thank the White House and the leadership for including those
protections. Without them, at least two of our major airlines would not
be able to continue in business next week. This is critically
important, as is the provision in the measure for direct loans to those
who can demonstrate their need to the Secretary of Transportation as
well as loans which are to be structured by a board composed of the
Secretary of Transportation, the Chairman of the Federal Reserve, the
Secretary of the Treasury, and the Comptroller General. We put a great
deal of discretion and responsibility in the hands of those very able
officials. While none of us may have crafted the bill exactly as it was
crafted, this is our only hope to ensure we do not have a disaster
resulting from the total shutdown of the airline industry.
I urge my colleagues, I beg my colleagues, to pass it.
I return to the manager on this side any time remaining on my time. I
thank the Chair and the Senator from Texas for their accommodation.
The PRESIDING OFFICER (Ms. Stabenow). The Senator from Texas.
Mrs. HUTCHISON. I will take up to 3 minutes of time now to explain
what is in the bill, but I want to be told when 3 minutes is up because
I will lose the remaining 30 minutes to other people.
The PRESIDING OFFICER. The Chair will notify the Senator.
Mrs. HUTCHISON. Madam President, the Air Transportation System
Stabilization Act is the effort of the U.S. Congress, working with the
President, to shore up the aviation industry in our country. Already we
have seen announced almost 100,000 layoffs in the aviation industry in
our country. That will have a rippling effect throughout the economy.
What we are doing today is trying to stabilize this industry to keep it
on its feet in very tough times so we can minimize the layoffs.
Hopefully, they will not be as bad as the airlines announced they will
be and we
[[Page S9590]]
can get this country back on track so our economy will stay strong.
What this bill does is have $5 billion in immediate assistance to the
carriers based on their actual losses for the grounded airplane time
they have had. As we know, there is still one airport that does not
have service. We still have airlines losing business because of the
September 11 tragedy that was not any fault of theirs.
We have in addition $10 billion of loan guarantees subject to terms
and conditions set by the President. There will be a board created to
review and decide on the applications for these Federal credit
instruments. The board will be the Secretary of the Treasury, the
Federal Reserve Chairman, the Secretary of Transportation, and the
Comptroller General. These loans will be based on sound, solid,
hopefully, financial integrity. We are also going to put limits on
executive compensation of any carrier that gets a part of this airline
cash assistance package.
We also have provisions for the Secretary of Transportation to
provide help for airlines that are the only airline serving a
community, and if the airline wants to pull out, we are going to try to
encourage that airline to stay in the community. We are dealing with
the liability issues, trying to take from the airlines any liability
beyond what their insurers will carry.
We also have liability provisions for the war risk insurance for all
other industries that might be affected in the future with an act of
terrorism that is beyond their control so that they will not be liable
beyond their means and be put out of business.
These are the basic parts of this legislation that we are hoping to
pass tonight and send to the President.
I yield up to 10 minutes to the Senator from Illinois.
Mr. FITZGERALD. Madam President, I rise to say what I think are some
improvements that have been made to the bill as it has been negotiated
by various parties in the House and the Senate, and I guess with
involvement from the White House and the Office of Management and
Budget.
I am very concerned about the airline industry and especially the
many employees of the industry. Tens of thousands of airline employees
have already been laid off. My home State of Illinois is home to O'Hare
International Airport which is a hub for United and American Airlines,
the Nation's two largest carriers. Perhaps no State in the country is
as immediately affected by the problems affecting the aviation industry
as is Illinois. I am very concerned about the employees. I met with
several skycaps the other day who told me it was their last day on the
job, and to see the forlorn look in their eyes was heart wrenching.
However, I alert my colleagues, the way this bill is designed, there
is no protection for the employees of these airlines. There are no
strings, really, attached to the airline access of up to $15 billion in
taxpayer money. It is money that some airlines will take, and still we
will see lots of layoffs and poor treatment of some of the airline
employees.
I think Congress is remiss; we are moving too fast. We should have
some strings attached if they are getting all this government money. We
should have some protections for the airline employees. That is an
omission in this bill.
I am also concerned that anytime you have a Federal bailout of an
industry, you have to ask, by what principle or what reasoning are you
bailing out this industry? In this case, we have chosen to bail out the
airline industry. The airline industry has said they are entitled to
Federal money because the Federal Government issued a ground stop order
on September 11 that kept their planes out of the air for at least 2\1/
2\ days, and but for that ground stop order, that edict of the
Government, they would not have incurred the losses they did during
those days.
This bill might make sense if we were only compensating them for the
losses incurred by virtue of that ground stop order. The fact is we are
compensating them for many times the losses they suffered as a result
of the ground stop order.
Analysts testified before the Senate Commerce Committee yesterday. I
sat in the whole hearing for 4 hours. We heard from many people. It was
testified that the direct loss to the aviation industry in America as a
result of that ground stop order on September 11 was $2 to $3 billion.
That comports with the estimates that have come out from research
departments, investment banks around the country, and comports with
everything I have seen. Yet this bill has $5 billion in direct cash
assistance and another $10 billion in loan guarantees or $15 billion in
Federal taxpayer bailouts.
Leo Mullin, the CEO of Delta Air Lines, testified that the direct
loss of Delta Air Lines for each day they were shut down as a result of
that ground stop order was $70 million. So over 3 days, Delta Air Lines
incurred a loss as a result of the ground stop order of $210 million.
How much in Federal assistance will Delta get as a result of this bill?
At least four times the losses they sustained as a result of the ground
stop order. Delta will get about 60 percent of the $5 billion in cash
assistance. In other words, they will get a grant of about $800
million, four times their losses, plus they will be eligible for these
new loan guarantees.
The bottom line is, I think this assistance is too generous. It gives
too much money. It goes far beyond compensating the airlines for those
3 days that Government edict was in effect.
Clearly we are compensating them for far more. In fact, this bill
suggests we are compensating them for all their losses through the end
of the year. Then my question is, By what principle do we not agree to
help other industries?
I had the general counsel of a major car rental company call me and
say they needed the bailout. I had restaurants tell me they are
shutting down. There are hotels shutting down. The fact is, those other
industries did not quite have the effective lobbying team the airline
industries had. They were very prompt in coming to Capitol Hill and
requesting relief. And, moreover, they got this relief in a way that I
think is virtually unprecedented.
When the Chrysler Corporation got its loans guaranteed back in the
1970s, in return for making those Government guarantees the Federal
Government was paid in warrants of Chrysler Corporation stock. The
Government took 14 million warrants of Chrysler Corporation. When those
warrants rose in value as the company did better and got back on its
feet, the Government sold those warrants at, I believe, a $300 million
profit.
Fortunately, Senator Corzine and I worked together. We did get put
into this bill, at our request, language to allow the Treasury
Department, in return for any of the loan guarantees that are given out
under this bill--the Treasury will have the authority to negotiate
appropriate warrants so the taxpayers can participate in the upside
here.
I would prefer that the Treasury Department have clear authority to
ask for warrants in return for the $5 billion in cash assistance. I
think that would be the appropriate protection for the taxpayers. In
fact, without that protection, then, what we are doing, by the way we
are structuring this bailout--this is not a bailout of the industry so
much as it is a transfer of the loss that industry has incurred from
the airline industry shareholders to Joe Taxpayer.
It may be intuitive to some that the general decline of the industry,
that loss, should be borne by the taxpayers. To this Senator it is not
intuitive that the shareholders of airlines should be protected and
indemnified from any loss here. I find it very troubling. I think there
should be a price the shareholders have to pay.
I hope the Treasury Department and the Office of Management and
Budget will try to find if they have any residual authority --they tell
me they believe they do--to ask for warrants from each airline in
return for the grants they are given.
In the Continental Bank bailout, which happened in Chicago, IL, many
years ago, in the 1980s, the FDIC did not come in and make the
shareholders of Continental Bank rich. In fact, they wiped out the
shareholders of Continental Bank in return for the Government
assistance, and FDIC ended up owning 80 percent of the bank. Then, when
the bank got back on its feet, the Government did an initial public
offering of its shares and sold them back to the public and recouped
for the taxpayers what they had given.
I think we could have done better. It is an improvement from where it
was
[[Page S9591]]
earlier in the process. I certainly hope the issuance of warrants--and
the Treasury has the authority now to accept warrants in return for the
issuance of the loan guarantees--I hope that authority on the part of
the Treasury will deter companies, airlines that do not need a Federal
guarantee, from coming to the taxpayers and asking them for that
guarantee. So I am hopeful the Treasury will use that authority to the
fullest extent, and I am hopeful, furthermore, that in return for the
cash grants available under this bill, the Treasury will insist upon
getting some equity instruments in the corporation or some payment for
the taxpayers, lest this just be a complete and total indemnification
of the sophisticated shareholders of the airline industry.
Madam President, I yield the floor.
Mr. CORZINE. Will the Senator yield for a question before he yields
the floor?
The PRESIDING OFFICER. The Senator has no time at this time. His time
has expired.
Who yields time?
Mr. ROCKEFELLER. The Senator from West Virginia is happy to yield 5
minutes to the Senator from New Jersey.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. CORZINE. I wonder if I might ask a question of the Senator from
Illinois with regard to his premise that would not be subtracted from
my time?
Mr. ROCKEFELLER. If the Senator wishes to do it, it is on his time.
Mr. CORZINE. The Senator from Illinois spoke about the need to ensure
some accountability by giving the Government a stake in airlines that
are provided grants beyond the funding necessary to compensate them for
the shutdown period. I agree with him on that.
Has the Senator had conversations with anyone on this question? Has
he been led to believe that equity participation--warrants, options,
calls--also will be extended to grants that go beyond compensation for
losses associated with the shutdown?
Mr. FITZGERALD. Yes, I have, in a conversation, I think, with Sean
O'Keefe from the Office of Management and Budget. He works for Mitch
Daniels. He was under the impression that the executive branch had the
authority, in return for granting $5 billion worth of cash assistance,
to demand warrants or other appropriate instruments from the airlines
that were getting them, and that that would deter the airlines from
asking for more than they should.
Mr. CORZINE. Is it the Senator's belief that the equity stake
associated with those grants would operate in the same way that is
explicitly outlined in the bill with respect to loan guarantees, with
respect to which the Treasury clearly has the authority to access
warrants, options, or calls?
Mr. FITZGERALD. Yes. Just as in return for the loan guarantees the
Treasury could ask for warrants, I believe that in return for the cash
grants, the Treasury can ask for warrants from the corporation.
Mr. CORZINE. I thank the Senator from Illinois for helping clarify
this, and making clear what the administration has said about this
aspect of the bill.
Having said that, Madam President, let me emphasize that I rise very
much in support of the efforts to reinforce our aviation industry. This
industry is in dire straits. And it is an industry that plays a
critical role in our economy.
It also plays an important role for our military. Senator Torricelli
and I visited McGuire Air Force Base with senior officers on Monday,
and they told us that about 40 percent of the transportation that our
military folks will need in a full war might be provided by our private
aviation industry. The strength of that industry clearly is important
for our national security.
Madam President, I live in a State where about 12,000 Continental
employees work at Newark Airport. It is the largest employer in Newark.
I very much understand the needs and desires of having a healthy and
ongoing industry which is under stress. But, in my view, unless we have
some discipline in this process--which very clearly has been outlined
in the bill as it relates to loan guarantees--we would be writing a
blank check for some companies that are very strong. This would be
unnecessary and could dissipate resources that could be better spent on
other important priorities, including workers who are losing their jobs
and other struggling companies that are not in the airline industry.
In my view, it would be a mistake to provide direct support without
discipline. So I hope the Administration will do what it said it will
do, and ensure that, as with the loan guarantees, the grants that we
are offering companies--beyond those needed to compensate them for
losses directly associated with the stop order--are accompanied by
warrants, or options held by the Federal government. This will help
ensure discipline and accountability, just as would be required in the
private sector.
Mr. ROCKEFELLER. Madam President, I would like to commend the
Majority Leader for his hard work in putting together an airline
stabilization bill that will save our nation's airlines and our air
transport infrastructure. I will strongly support this bill without
amendment.
The terrorists who launched those despicable attacks on September 11
took thousands of American lives, and did billions of dollars of
damage. It has also become clear in the past 10 days that they dealt a
body blow to the U.S. airline industry, on which virtually all of our
citizens depend on to one degree or another.
Demand for air travel has virtually collapsed in the past week. Last
weekend I flew back to West Virginia, and on the return flight Sunday
night--usually a crowded flight from Charleston to Dulles--I was the
only passenger on the plane. Many of my colleagues have mentioned that
they've had similar experiences in the past ten days. Flights are
departing West Virginia airports with a load factor of 25 per cent--
only one in four seats filled. Unfortunately, this is not, like last
week's closure of the New York Stock Exchange, a temporary phenomenon.
Based on past air disasters or international conflicts--none of which
was of the same massive scale as last Tuesday's attacks--airlines are
predicting that passenger traffic will be down by almost half for the
remainder of this year, and will take until next summer to return to
normal levels. And those are optimistic estimates.
This kind of crisis could do irreparable harm to the ability of
America's airlines to continue in business. Airlines lost $300 million
each day that they were shut down last week. They are set to lose
billions more in the coming months. Their insurance rates have shot up,
with some airlines telling us of a 600 percent increase in their
insurance rates. Coming on top of what was already a difficult outlook
because of our slowing economy, the nation's airlines--main line
carriers and regional carriers alike--could be in bankruptcy within a
few weeks and possibly out of business within a few months. Already we
are seeing the first signs: a round of massive, painful layoffs for
nearly 100,000 of our nation's hardworking airline employees. And huge
cutbacks of around 20 percent to most airlines' schedules.
Some people have said, well, this is the market, and it is not the
American way to interfere with the market. But I have been pleased, as
chairman of the Senate's aviation subcommittee, to see a broad
consensus among my colleagues that the air transport industry is not
just a huge business and employer, but it is also a critical element of
our nation's infrastructure. Nowhere is that more the case than in the
smaller states and communities like West Virginia. When people think of
the airline industry, they usually think of big hub airports like
Hartsfield and O'Hare. But airline traffic is just as important--maybe
more important to smaller communities like Beckley and Bridgeport.
Safe, convenient and affordable air service represents an important
element of our efforts to attract development to our state. It's an
important connection that allows our citizens and our businesses to
overcome the historic isolation created by our state's mountainous
terrain.
And when I see planes flying with one passenger, and learn that
carriers are cutting back on their schedules, and hear that several
carriers could be in bankruptcy within two weeks, I know that the first
communities to be hit will be small communities like those in
[[Page S9592]]
West Virginia that are at the end of the food chain, so to speak. That
would be tragic. It would reverse the efforts our communities have made
to attract and retain air service, and turn their residents into
aviation ``have nots.'' It would also set in motion the slow implosion
of the U.S. airline industry, which would spread to larger hubs and
airports as well. And finally, it would give the terrorists who
perpetrated last week's heinous attacks the ultimate victory, as their
actions would lead to a severe curtailment of America's freedom of
movement and mobility.
It is the shared consensus of this body that cannot be permitted to
happen, and that has driven our remarkable efforts this past week to
put together a stabilization package for our nation's airlines.
It will contain up to $5 billion in immediate credits to reimburse
airlines for the revenues they lost when the government shut down U.S.
air space last week. It will also contain $10 billion in loan
guarantees so that our airlines can continue to obtain financing in the
coming months.
It will limit airlines' liability for collateral damage incurred up
to the amount of their existing insurance coverage as a result of last
week's terrorist attacks--a key provision because our airlines might
otherwise not be able to obtain or afford insurance.
It will set up a victim's compensation fund for the families of the
innocent victims of last week's despicable attacks
It will provide $120 million in additional authority to fund to the
Essential Air Service program, a key element in preserving air service
to smaller communities.
This package is an important first step in stabilizing the U.S.
airline industry and ensuring that air service to communities across
the nation survives this crisis. But it does not address all the needs
that this crisis has created.
One important issue we will need to take up in short order is the
plight of the nearly 100,000 airline workers who will lose their jobs
as a result of this week's cutbacks. We have already begun to see
airline layoffs in West Virginia. Excellent workers who expected a
promising career in a growing industry, until terrorists hijacked four
planes and frightened Americans out of the skies. We must take measures
to address their needs. We provide special assistance to American
workers who have been displaced by foreign trade; we must provide the
same level of assistance to American workers who have been displaced by
foreign terrorism.
We must also be prepared to look at the needs of related industries,
as well as the future needs of the airline industry. Many related
industries--aircraft manufacturers, travel agents, and various travel-
related businesses--have already begun to feel the effects of this
attack. We will have to look carefully at the real needs of those
industries, and be prepared to take bold measures where they are needed
and appropriate.
One thing is certain: the survival of America's airlines is a key
element of any solution. Their needs are real and urgent, and I
congratulate the Majority Leader on his success in putting together a
stabilization package that will address them.
Madam President, Senator Schumer and I believe Senator Clinton wants
to speak, along with the Senator from Texas and a few others. But I
note that the Senator from Texas has an obligation, as well as all of
us, and we would like to see this drawn to a close and have our vote.
Those who want to speak on other subjects could perhaps do that after
the vote. It would be just as relevant.
From my point of view, we are at a very clear and obvious,
arithmetically, inevitable point in time where we have to say to the
aviation industry of the United States and, even more importantly, to
the American people that there are going to be planes flying on Monday.
We have to have a safety bill. That is an enormous subject, and safety
has to come. Safety will come. Safety is going to be addressed
immediately. There are planes to make safe. People need to feel
confident about safety and then get aboard the plane. None of it makes
any difference if their insurance expires. When insurance expires--
airplane companies have all received their notices--then of course
there can be no flights. That will happen very early next week. The
Nation will shut down with respect to that.
The whole question of providing support on a temporary basis and
based only on what happened as a result of the tragedy on September 11
is important. Nothing that the Senate will be voting on will be based
upon anything that had to do with the airlines' financial condition
prior to September 11--only as a result of the tragedy on September 11
and the Government-mandated shutdown.
There are a lot of considerations about the broad economy of America
as well as the ability of the American people to gain some level of
confidence in getting back to travel. In fact, there are airplanes at
the airport they can board. I remind all Americans as well as my
colleagues that airlines remain far and away the safest form of travel,
and they have been that way for a long time in comparison with any
other form.
Safety will happen. Safety is somewhat more complex, and it will
happen. It will be done by legislation. It will be done by the
administration. There will be a lot of money for it. But the ability of
the aviation industry to put planes in the sky next week is where we
have to start. If we do not pass this legislation, and do not do so
promptly, it will not happen.
I urge my colleagues--who understandably are saying: Wait a second,
what about my rental car company or what about my steel industry--there
are all kinds of things that can come into an emergency designation.
But here, we are focused on aviation. That is the order of this day
within our national security situation. If the planes don't fly, much
of the economy shuts down. I think this is arithmetically
uncontestable. I think it is an absolute priority of this Senate to
pass it and hopefully do so in a very short amount of time.
I call upon my colleagues to at the proper time support this aviation
legislation--not to say that it is perfect, not to say that some of the
legislation which has arisen out of this crisis is perfect. We will
have a chance to revisit it. This is only the first of a wave of
accountability and dealings with the airline industry, its financial
health, safety, and all other manner of conditions that are coming
before us. Without this, nothing else follows.
I plead with my colleagues to support this legislation in spite of
worker protection and other things which will be absolutely a part of
what follows this vote and this legislation.
I reserve the remainder of my time and yield 5 minutes to the senior
Senator from the State of New York.
The PRESIDING OFFICER. The Senator from Texas is recognized.
Mrs. HUTCHISON. Madam President, I ask unanimous consent, following
the Senator from New York, to yield time to the Senator from Alabama,
who has been waiting for 5 hours.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from New York.
Mr. SCHUMER. Thank you, Madam President.
First, I thank the chairman of our Aviation Subcommittee, the Senator
from West Virginia, and the Senator from Texas, the ranking member, and
everybody who worked so hard on this issue.
I particularly thank our leader, Tom Daschle, for his outstanding
efforts on this bill and for all the help he provided to New York and
the Nation in this recovery from the crash and tragic events of
September 11. I also want to thank his talented staff who worked long
and hard on into the night in working out provisions that were vexing
to me--they are: Andrea LaRue, Laura Petrou, Randy DeValk, Mark
Childress, and Mark Patterson--for all of their help during the past 2
weeks.
In addition, there are two technical points I want to clarify. It may
be a little unclear to some whether all lawsuits or just lawsuits
against the airlines will be situated in the Southern District of New
York. The intent here is to put all civil suits arising from the tragic
events of September 11 in the Southern District.
Second, the prospective liability package covers the airlines, their
agents, and other relevant parties. Agents includes, as I understand
it, airplane lessors and financiers.
This bill is a mixed bag. It has some things that I am grateful for
and support. It does not take any of this
[[Page S9593]]
money from the $20 billion we were able to vote for for New York. There
was a real attempt to do that. It does not. I appreciate that.
There was a huge fight on the liability issue. I understand the need
for prospective liability exemption. But at some point the families of
those who died in the World Trade Center and not on the airplanes are
going to be treated differently than victims had been and those who
died who were on the ground or in buildings in the past. That has been
rectified. There is a very generous package for those families who lost
members in the World Trade Center bombing--who were in the World Trade
Center, not just on the airplanes.
Finally, my crusade has been to bring good service to the middle-
sized cities of upstate New York. While I am not fully satisfied with
the provisions, there are provisions in the bill, and let us hope that
is the beginning of a new chapter. The airlines are no longer totally
independent. Therefore, I am relying on them in my meetings with them.
What the majority leader and others have told us is that as we come
back in future bills, we will strengthen those provisions further so
that these airlines cannot abandon middle-sized cities such as
Rochester, Syracuse, Albany, and Buffalo--rather large cities that
depend on airline service. But there is a provision in the bill that
recognizes some of that. It is better than the present law, and I
appreciate it.
For all those reasons, this bill is a bill I will vote for. I have
some misgivings. Amtrak should have been included in this bill. To have
a comprehensive transportation system, we need a good rail system. The
congestion that so many of us see in New York airports and other
airports around the country could well be relieved by a functioning
Amtrak. Again, I am relying on the understanding of our leadership on
both sides of the aisle that when we come back and do other airline
bills, we will include Amtrak.
It also does nothing for the workers. I am very worried, and I urge
the airlines not to invoke a war clause when they deal with their union
workers. Yes, indeed, when business contracts, we don't expect airlines
not to accept those economic consequences, but I would regard invoking
that clause as a breach of faith. I hope they will not do it. I hope
they know they will have to come back to us and deal with it. We have
to include employees and what they need in this package as well.
It is a mixed bag: good on liability, good on where the money comes
from, and OK making progress on taking account for middle size cities;
not enough, nothing for Amtrak, nothing for labor, but we will come
back and deal with those issues.
If it is a mixed bag, why am I supporting this bill? Because we are
in a new era where every one of us has to give a little bit. We heard
the President speak. We were unified yesterday. We must keep that
unity. It is important that each one of us no longer say: It is my way
or no way.
I didn't get everything I wanted in this bill. I did get some things.
I am a little worried about the numbers as well.
If we don't vote for this bill and we bicker, airlines will not fly
on Monday. It will set a tone in this body that we don't need right
now.
Relying on the good work of our majority leader and our minority
leader and knowing we will get back to the other issues we care about,
I will vote for the bill, and I urge my colleagues to do the same.
Mrs. BOXER. Madam President, I am pleased that the Senate has been
able to act so quickly on this issue.
As you know, all four planes hijacked last week were headed for my
State of California. Consequently, many Californians who were simply
trying to make their way home lost their lives in these attacks. My
heart goes out not only to the Californians who fell victim to
terrorism, but to all the victims of last week's attacks and their
loved ones.
Our Nation's aviation system was transformed into a terrorist weapon.
As a result of the terrorist attack, the airlines are confronting an
alarming financial situation. Last week's tragedy will be compounded if
the aviation industry is destroyed as well.
As an industry, airlines are losing $300 million per day. Lines of
credit may not be available. Insurance premiums for some airlines may
rise $100 million per year or may be unavailable period. Without
insurance, the airlines cannot fly.
Therefore, I support this bill to provide financial assistance to the
airlines. I also support a victim's compensation fund to help ensure
that victims' families receive compensation in a timely fashion.
I am particularly pleased with the language in this bill that commits
$3 billion of the $40 billion in the emergency funding that we passed
last week for airline security. I hope this funding is used to improve
screening in our airports. It is extremely important that security be
the responsibility of the Federal Government, including creation of a
professional security force for passenger screening. I also believe the
funding should be used to increase the number of air marshals by
placing an air marshal on every commercial domestic flight.
This is only the first step in aviation security. In the next week or
two, I will be working to see that Congress passes comprehensive
security legislation, including federalizing screening and guaranteeing
that air marshals are on every flight.
Finally, I am disappointed that this bill, while bailing out the
airlines, does not provide assistance to laid-off workers. This week
almost 100,000 jobs were lost industry-wide. That is 100,000 families
who are losing their incomes.
These numbers do not even include the manufacturing sector of the
airline industry. Boeing also announced that it could lay off as many
as 30,000 employees in the next few months.
We must not forget the workers who are affected. They may need help
with job training and acquiring new skills. They may need help with
keeping their health insurance. Again, I will be working to see that
help comes to these families soon.
This bill is important, but it is only the beginning of what we need
to do after last week's tragic events.
Mr. NELSON of Nebraska. Madam President, as we discuss this much
needed legislation to provide financial assistance to our airline
industry, I would like to voice my concern that air service to our
small communities not be lost in this effort. I have consistently
supported adequate funding for the Essential Air Service Program, and
ensuring the viability of our small airports is a priority for me.
Because I realize the economic impact a loss of air service would have
on our small, rural communities, I applaud the efforts made in this
legislation to include the needs of carriers who serve these markets.
It is important that in considering financial assistance for the
airline industry, that thought is given to the impact this tragedy has
had on the regional airlines, which service our small communities.
Essential air funding is critical to providing air service to most of
the communities in Nebraska, as I know is the case in many States. As
we continually focus on how to regain confidence in our economy, I
believe this is one area where Government assistance can truly be
beneficial. Because it is imperative to the economic wellbeing of these
small communities that air service be continued, increasing the level
of essential air service funding is critical to ensuring the air
carriers serving small communities can continue to do so.
I understand that the bill contains language authorizing the
Secretary of Transportation to require air carriers currently receiving
direct financial assistance to maintain scheduled air service to any
point served by that carrier prior to September 11. In addition, the
Secretary may require these carriers to enter into agreements, which
will, to the maximum extent practicable, ensure that all communities
that had scheduled air service before September 11 continue to receive
adequate air service.
I do have concern that in light of recent events some of these
carriers will cut service to communities that rely on Government-
subsidized air service. Therefore, I urge the Secretary of
Transportation, in carrying out his authority under this bill with
respect to these carriers, to consider the devastating impact cutting
air service to small communities, especially rural communities, will
have. It is my hope that the provisions of this bill provide sufficient
protection of air service to small communities.
[[Page S9594]]
Mr. McCAIN. Madam President, the bill that we are voting on today not
only provides financial assistance to airlines, it addresses the issue
of legal liability for the tragic events of last week by creating a
federally-funded victims' compensation fund and by limiting airlines'
potential legal liability to ensure their continued operation.
The effect on the airlines of the September 11 terrorist attack put
Congress in the unenviable position of having to take immediate action
to prevent the collapse of the aviation industry as a result of the
federally ordered grounding of all aircraft and the anticipated
reduction of air travel.
One of the most difficult issues we had to grapple with was the
enormous potential liability that airlines faced if courts determine
that they were negligent and in some way responsible for the damage
wrought by the terrorist attacks last week.
Aviation financiers informed Congress that this potential liability
was a barrier to the airlines' obtaining credit in the private market,
which we anticipate they will soon have to seek despite the direct
financial assistance we are providing to them today.
The vast uncertainty of our litigation system posed significant
challenges to crafting reasonable limitations on airline liability
while providing compensation for the victims of the terrorist attacks
and their families.
Disturbingly, while courts could order the liquidation of our biggest
airlines if they are deemed liable for the catastrophic damage of
September 11, victims could also receive no compensation from the
courts if they determine that corporate entities, including airlines,
were not responsible for the devastating damage arising from the
terrorist attacks.
We faced two unsatisfactory outcomes: 1. that the airlines, whose
liability insurance coverage is insufficient to cover all damage, would
be dissolved as their assets were sold to pay off their liability and/
or; 2. some or all of the victims who were injured or killed in this
tragedy would receive no compensation.
The liability provisions in this bill are by no means perfect, but
they are intended to prevent these two unacceptable results.
To ensure that the victims and families of victims who were
physically injured or killed on September 11th are compensated even if
courts determine that the airlines and any other potential corporate
defendants are not liable for the harm; if insurance monies are
exhausted; or are consumed by massive punitive damage awards or
attorneys' fees, the bill also creates a victims' compensation fund.
These victims and their families may, but are not required to, seek
compensation from the Federal fund instead of through the litigation
system.
At the same time, to provide for the continued operation of our
airlines, the bill limits airlines' civil liability to the amount for
which they were insured at the time of these unforeseen events.
No amount of money can begin to compensate the victims for their
suffering. Nothing will make them and their families ``whole.'' It is
not the intent of the federal fund to do this. Nor is it the intent of
the fund to duplicate the arbitrary, wildly divergent awards that
sometimes come from our deeply flawed tort system--awards from which up
to one third or more of the victims' award is often taken by attorneys.
The intent of the fund is to ensure that the victims of this
unprecedented, unforeseeable, and horrific event, and their families do
not suffer financial hardship in addition to the terrible hardships
they already have been forced to endure.
In addition to removing the specter of devastating potential
liability from the airlines, and guaranteeing that victims and their
families will receive compensation regardless of the outcomes of the
tangle of lawsuits that will ensue, the bill attempts to provide some
sense to the litigation by consolidating all civil litigation arising
from the terrorist attacks of September 11 in one court.
It is regrettable, but perhaps inevitable, that the unity that this
terrorist attack has wrought will devolve in the courts to massive
legal wrangling and assignment of blame among our corporate citizens.
It is my hope that the liability provisions we are adopting today will
serve, to some extent, to reduce this, and produce as fair a result as
possible in light of the gross injustice of these events.
Mr. GRASSLEY. Madam President, I am pleased that the Senate is moving
with great speed to insure the short-term stability of our nation's
airlines. The tragic events of September 11 have unfortunately made
this legislation an absolute and immediate necessity. This Senate us
wisely moving with great dispatch.
This act is difficult for all of us. It has not been easy to
negotiate by any means. But the Senate has come together for the good
of this great nation to do the right thing. That is, to keep the
airlines in the air.
The airline industry is a marginal industry, just like farming. And
just like farming, it depends upon a constant and consistent flow of
cash. That critical cash flow dried up on September 11. This
legislation provides needed cash assistance and loan guarantees to make
up for the current terrorist induced shortfall.
The bill also addresses critical liability issues. As a member of the
Judiciary Committee, I will monitor these provisions continually and
closely as to their propriety and proper functioning. I will not
hesitate to step in as I see necessary should the situation call for
further action.
I welcome the language concerning Essential Air Service, EAS. This is
a proven program with an administrative bureaucracy already in place.
State and communities understand the EAS program and its important role
in maintaining air service to small, underserved communities. This
program has the potential to help several communities in Iowa which now
face the loss of air service. It will help to prevent these small
communities from bearing the brunt of air service reductions. I
strongly urge appropriations to provide the funding necessary to insure
the success of the program.
I wish this measure was not necessary. But it is. The cowardly acts
committed by terrorists on September 11 have made it so.
The terrorists will not win. The American airlines will continue to
fly, and Americans will continue to fly on them. Our economy and
culture will grow and thrive. Of this, I am confident.
Mr. HATCH. Madam President, I rise to speak about S. 1450, the Air
Transportation Safety and System Stabilization Act.
Let me first say that I support the intention of this bill. I want to
ensure that the victims of this heinous crime receive just compensation
while at the same time we provide much needed stabilization to the
airline industry. That balance is a very difficult thing to achieve. I
have very strong reservations about whether we accomplished that task
in a fair or feasible manner here today. It is with mixed emotions that
I support this bill. I hope that there is an opportunity to address
these concerns down the road and to improve on what we have done here.
This bill does do some good. We provide a generous administrative
remedy for all victims who were physically injured or killed as a
result of this attack. This will help ensure that injured people
receive money and receive it faster than they otherwise would if left
to pursue claims through litigation. It also provides that the Federal
Government can recoup, to the extent possible, any money from the
responsible parties, including the terrorists whose assets we may be
able to recover in the future.
We also provide the airlines with some much needed cash to cover the
losses they incurred as a result of the Federal Aviation
Administration's ordered shutdown of air traffic for nearly a week.
However, we have not included a provision that I wanted to guarantee
that once the airlines receive this cash infusion and government loan
guarantees, they would not discharge their federally guaranteed debt in
bankruptcy.
The limitation on liability included in this bill has some productive
aspects. We limit the liability of the airlines to the extent of their
insurance coverage in order to allow them to keep operating. In my home
state of Utah, Delta Airlines employs over 4,700 people. I don't want
to see a company that employs so many people in my State go out of
business. Air service is
[[Page S9595]]
essential. However, we also must protect the liability of other
defendants in potential litigation. If we do not, then we very likely
will place other defendants in a worse position than if we do nothing
at all. For instance, under the legal principle of joint and several
liability, even if a nonairline defendant is only 10 percent liable and
the airline is determined to be 90 percent liable, the nonairline
defendant may be required to pay more than its share of liability
because the airline's policy limits have been exceeded in the judgment.
This could be an unfair outcome and is a serious concern. Do we really
accomplish our goal of keeping air transportation operating if we
sacrifice the other entities that contribute to a well-functioning
airline industry? I am talking about the airline contractors and
subcontractors as well as the companies that built the planes, the port
authorities, and even those that built the World Trade Center itself.
For those who seek to pursue the litigation route, I am pleased that
we consolidated the causes of action in one Federal court so that there
will be some consistency in the judgments awarded. However, because the
pool of funds available to potential plaintiffs will be limited, we
need to eliminate, or at least limit, the punitive damages that can be
awarded. I do not want to deny any legitimate plaintiff just
compensation. He or she should receive both economic and reasonable
noneconomic damages which would include everything from lost earnings
to emotional distress. However, If we do not limit outrageous jury
awards of punitive damages, we run the risk of denying some plaintiffs
their rightful share in an award. If one plaintiff's punitive damage
award is excessive, it could very well deplete the amount of funds
available to pay awards, leaving other plaintiffs out in the cold.
Don't we want to ensure that all legitimate plaintiffs receive
compensation?
This was indeed a horrible attack on our country and I have
confidence that the President will make sure that the terrorists are
brought to justice. With this bill the Government attempts to provide
some relief to the victims of this attack. Unfortunately, the
Government cannot do everything. What pleases me most in the aftermath
of this tragedy is the extent to which the communities across the
country have reached out to help their neighbors. We have all heard of
those heroic firemen and police officers who gave their lives trying to
save the lives of others. Also, those noble passengers who sacrificed
themselves rather than let the terrorist inflict even greater damage on
the ground. There are many wonderful charitable organizations such as
the Red Cross and the Salvation Army who responded immediately to
assist victims of the terrorist attack. Donations have been pouring in
from across the country to assist the victims. It warms my heart and
reminds me of the Thousand Points of Light that President Bush's father
often referenced regarding the generous nature of our communities.
Because of all of this, I am confident our country will come out of
this tragedy stronger.
Mr. CLELAND. Madam President, I rise today to direct my colleagues'
attention to the needs the workers who play a vital role in our
nation's aviation system--tens of thousands of men and women who are
often overlooked by those who travel by air. From the ticket agents to
the sky caps to the mechanics, these workers support the American
airline industry and promote its viability.
These same workers were uniquely impacted by the terrorist attack on
September 11, 2001. Their place of work--a place that should be safe--
was violated when terrorists turned the four commercial planes into
missiles. On that fateful day, the air travel system in this country
ground to a halt. The order to ground our aircraft was an unprecedented
and correct action by the Department of Transportation. For the next
four days there was virtually no air travel in this country, and the
airlines suffered huge financial losses.
In the wake of this tragedy and as the airline industry is returning
to the skies, the Administration and Congress are working to stabilize
this industry. Unfortunately, the aid Congress is providing will not be
enough to retain the entire current workforce of the major airlines. I
have heard that lay-offs in the airline industry could top 100,000 by
next week! That is one hundred thousand people who will be faced with
losing their health insurance and their source of income. One hundred
thousand people who will be faced with reviewing their retirement
plans. One hundred thousand people who will be faced with making
difficult decisions. These people cannot be forgotten.
While I will be supporting the economic aid package for the airlines
without a provision for employee assistance, I will be redoubling my
efforts to ensure these dedicated employees, who are casualties of the
first war of the 21st century, will not be overlooked. I am
cosponsoring a bill introduced by Senator Carnahan to provide benefits
to the dislocated employees of our aviation industry. This package of
relief would provide funding for unemployment insurance and health
insurance, and it will contain provisions to aid in the retraining of
these workers. These are basic measures we can and must take to help
stabilize these employees.
No one expected September 11 to develop as it did, and we are reeling
from this tragedy. Congress is appropriately acting today to support
the airlines--an industry critical to our national security and
economy. And I fully support and will work to enact a package of
assistance to those workers who are suffering as a result of this
attack.
Mr. FEINGOLD. Madam President, I will support this relief package,
however, I have a number of concerns. There is certainly a legitimate
need to assist our nation's airlines in this time of crisis. I am
concerned, however, that we are forgetting about airline employees and
their families, including many Wisconsinites. These massive layoffs are
a double blow to an already shocked country. We should act quickly to
ensure that those who work for our nation's airlines and their families
receive adequate relief, including continued access to health care and
unemployment and job training assistance. We must be careful that this
airline relief package is targeted at those airlines that are facing
economic losses due to the recent terrorist attacks and not instead
used to prop up firms that were already in financial trouble before
this tragedy.
Mr. LEVIN. Madam President, I am very disappointed language was not
included in the Air Transportation Safety and System Stabilization Act
addressing employee compensation for the thousands of airline employees
who have lost their jobs in the past week. It is imperative that we
address this in the immediate future. However, there is a crucial need
to act swiftly to stabilize the airline industry. Therefore, I will
support this legislation which includes a number of critical provisions
to stabilize the airline industry and restore confidence in this
industry. I hope that we will address employee compensation and
additional airline security issues in the very near future.
The airline industry is losing about $300 million to $350 million a
day. Losses incurred by the industry for the 2 days that the airlines
were grounded total $1.25 billion. In the past week alone there have
been 100,000 layoffs by the airlines including 10,000 at Northwest
Airlines. Northwest Airlines has as a major hub in Detroit and serves
as an economic engine for Michigan with over 18,000 employees in the
State. Northwest Airlines now has a net negative booking rate which
means that more people are calling to cancel their tickets than there
are people calling to purchase tickets. The airlines are now only
carrying about 30 to 40 percent of their normal capacity.
We cannot let this important industry go under. There is simply too
much at stake. This legislation provides an immediate $5 billion cash
infusion to stop the immediate hemorrhaging of the airline industry and
to cover their losses for the month of September. It also provides $10
billion in Government-backed loan guarantees which will help the
industry gain access to credit and maintain its long-term viability.
The airline industry currently has no access to capital because its
traditional collateral, airplanes, are now considered worthless by Wall
Street. The $10 billion will be made in the form of loans, not grants,
and that they will be paid back.
Under this bill, the Secretary of Transportation has discretion in
making the loan guarantees. For instance, when an airline applies for a
loan it
[[Page S9596]]
will have to provide access to its books to prove that the loan is not
going to repair past management actions that might have occurred before
September 11.
This bill also allows the Secretary of Transportation to use his
authority to require airlines benefitting from Federal funding to
continue to serve midsized and small airports and communities. This is
important for all those people in Michigan and around the country
living in rural communities who may depend on a single airline for
service. If that airline were to pull out, they would be left stranded.
In addition, the bill authorizes $120 million for the Essential Air
Service, an important program which subsidizes airline service in those
communities where it is not profitable to serve. This program allows
the Government to share some of the costs of providing service and in
exchange, the Government can require that a carrier continue to serve a
community. This guarantees that these communities will have airline
service. It is a program that is currently underfunded and in need of a
higher authorization which this bill provides. A number of Michigan
communities participate in this program and, unfortunately, others may
soon need to gain access to the program in order to keep the air
service they currently have.
Senate action today to provide the airlines with funding to keep them
solvent is very important. It will help return confidence to the
marketplace and keep some airlines from going under. But it is equally
important that we turn immediately to the other critical issues such as
providing assistance for displaced workers and airport security
measures.
Mrs. FEINSTEIN. Madam President, I rise today in support of the
financial package before the Senate to help protect a vital industry to
our Nation's economy. I believe that this legislation is one essential
component in a series of steps that Congress has taken, and will
continue to take, to address the tragic and horrific attacks of
September 11, 2001.
So far, Congress has taken considerable action in the wake of the
unprecedented events last Tuesday. Congress condemned the violence in a
joint resolution, Congress authorized the President to use ``all
necessary and appropriate force'' to retaliate for the acts of war
against our Nation, and Congress approved $40 billion to rebuild from
the rubble and prevent further acts of terrorism during this time of
great peril.
These are the steps Congress has taken so far, but they are not the
last of what we will do, or what we need to do to mitigate the damage
and destruction.
The next step we must take is to pass this financial relief package.
Once this is passed, Congress will need to consider legislative
solutions on other matters stemming from the September 11 attacks. For
example: What long-term changes do we need to make to our aviation
security system? How can we establish stricter guidelines on issuing
visas? How do we build up our homeland defense against more deadly
terrorist attacks in the future? What can we do to stimulate more
consumer spending, more job creation, and more investment in this time
of uncertainty?
The events of September 11 demand that Congress and the President
work together to remedy the devastation the attacks have inflicted upon
our safety, our economy, and our livelihood. The legislation before us
today is part of the comprehensive action Congress must take to help
our Nation reclaim unprecedented growth of which we know our economy is
capable.
The terrorist attacks of September 11 have dealt a crippling blow to
the airline industry. This package of assistance is essential to keep
the airlines up and running because they are an important component to
our Nation's economy. Airlines are the very backbone of our
transportation infrastructure enabling people and goods to flow freely
and quickly across our Nation.
Airline travel and air cargo shipments interconnect our global
economy and contribute a significant amount of jobs to the U.S.
Economy. Consider the following: Approximately 1.2 million people work
for the airlines in this country. Last year about 670 million
passengers traveled on commercial airlines and the industry provided
over 25 billion ton miles of freight delivery. The U.S. commercial
aviation industry contributes over 10 percent of the Nation's GDP.
Yesterday, David Walker, Comptroller General of the United States,
testified before the Commerce Committee. According to Mr. Walker, ``The
continuation of a strong, vibrant, and competitive commercial air
transportation system is in the national interest. A financially strong
air transportation system is critical not only for the basic movement
of people and goods, but also because of the broader effects this
sector exerts throughout the economy.''
The contributions airlines make to our economy are clear, yet the
industry estimates that the overall impact of the terrorist attacks
will cost $24 billion and companies may be forced to lay off over
140,000 employees. Airline stocks plummeted when the market reopened
Monday and they have continued to fall this week.
Secretary Mineta has indicated that the industry has been losing $300
million a day in lost revenue since Tuesday, September 11. Some
financial analysts predict the airline industry will lose $6.5 billion
this year, triple the $2.2 billion loss that was expected.
The ripple effect of the terrorist attacks is clear. Once people stop
flying, airlines cut back on flights. Lighter flight schedules mean
airplanes lie idle and companies' employees lose their jobs. Fewer
flights mean airlines do not need as many new planes or airplane parts.
So it comes as no surprise that this week, Boeing announced 30,000
employees would lose their jobs.
I have received many letters asking me to support this plan before
the Senate, and I believe it is important to point out that the vast
majority of these letters are not from airline employees, but rather,
from workers whose jobs are indirectly dependent on airlines.
One such letter is from G. Hardy Acree, the director of Sacramento
County's airports. Mr. Acree wrote, ``Quality air service is critical
to our community. Without it, Sacramento County's economic development
and tourism industry will suffer, and the growth we've worked so hard
to sustain will be lost. This is an issue whose impact goes well beyond
the airline sector.''
The same could be said for all of California's 58 counties and, in
fact, for every one of the 3,142 counties across the Nation.
The economic impact is spreading beyond U.S. borders. London-based
Virgin Atlantic Airways said it must trim its operations by 20 percent
and lay off 1,200 employees, the first ever layoffs for the company in
its 18 years of existence.
Just as the problems are not confined to one region, they are not
confined to one industry. The president of the American Society of
Travel Agents, Richard Copland, wrote to tell me of the tremendous
losses suffered by the travel agencies across the U.S. According to Mr.
Copland, ``There are many other groups of firms that are normally
thought of as separate `industries' but that in fundamental reality are
an integral part of what airlines do. Travel agencies are among
those.''
Travel agencies, hotels, cruises, and many other industries directly
depend on the airline industry. And there is almost no business that
does not indirectly depend on the airlines. How else do employees meet
with clients? How else do goods ship overnight?
As Jonathan Tisch, chairman of the Travel Business Roundtable, wrote,
``The link that airlines provide to the travel and tourism industry
cannot be underscored enough. Airlines are the conduit for so many
industry activities, bringing travelers to hotels, resorts, restaurants
and shopping in cities and towns around the country.''
I want to acknowledge Mr. Tisch's point, the collective ripple effect
airlines have on the entire economy is immense. I would like to ask my
colleagues and constituents to think of this legislation, not as a
bailout plan, but as a relief package. It is just compensation for the
direct damage inflicted on the airline industry and the U.S. economy as
a whole.
One more point I would like to make is that since my husband is on
the board of an airline company, the easiest thing for me to do would
be not to vote on this legislation. The Senate
[[Page S9597]]
Ethics Committee, however, has assured me that voting on this bill is
not a conflict of interest for me because there will be a wide range of
beneficiaries from this legislation.
Furthermore, at this time, the economic ramifications are as such
that I am compelled to vote on this bill because I strongly believe it
is in the national interest to do so.
We have allocated billions to rebuild in New York and Virginia. Let
us also allocate billions to rebuild our Nation's economy.
Mr. DOMENICI. Madam President, this is an important piece of
legislation. We need to enact it today. Without immediate financial
assistance, many airlines face imminent bankruptcy as a direct result
of the horrific terrorist attacks that took place on September 11.
This bill provides $5 billion in emergency direct assistance to
reimburse the airlines for the direct costs of the terrorist attacks
and preventing another attack. It also provides $10 billion in loans
and loan guarantees to help the airlines while they recover from these
attacks. These loans will also restore the confidence of the private
capital markets, which are unwilling to lend the airlines.
Because of this legislation, the airlines are going to be around to
pay back these loans. Therefore, from a budget point of view, the
impact of the loans on the Federal budget will only be about $3
billion. But the airlines get the $10 billion essential to keep them in
business.
Also, this afternoon President Bush made the first apportionment of
monies we appropriated one week ago today for the Emergency
Supplemental Appropriations Act for Recovery to the Terrorists Attacks.
Out of the $40 billion in that Emergency appropriation bill provided
to the President, he has this afternoon transferred nearly $5.1 billion
to Departments and Agencies to address funding needs related to the
attacks of September 11.
This is just the first in what will be many more transfers out of the
total funds provided. The Department of Defense will immediately
receive $2.5 billion and the Federal Emergency Management Agency will
receive $2.0 billion today.
But also within today's transfers is $141 million for the Department
of Transportation, the bulk of which is to the FAA to support immediate
increased airport security measures. I am sure, once again this is just
the first of what will be much more funding coming out of the $40
billion to increase security measures at our airports and expand the
Federal Sky Marshal program.
This expansion requires first-rate training for our new law
enforcement officers. The Federal Law Enforcement Training Center,
FLETC, in Artesia, NM, is uniquely positioned to serve as the primary
training center for the new sky marshals and other aviation law
enforcement officers. Moreover, it is located only 40 miles from the
Roswell Industrial Air Center, which can handle planes as large as
747's. These facilities can play a vital role in enhancing our Nation's
aviation security.
The PRESIDING OFFICER. The Senator's time has expired. The Senator
from West Virginia.
Mr. ROCKEFELLER. Madam President, the Senator from West Virginia
recognizes the junior Senator from New York for a period of 5 minutes.
The PRESIDING OFFICER. Without objection, the Senator from New York
is recognized.
Mrs. CLINTON. Madam President, I thank the Senator from West
Virginia. I rise to join the comments of my colleague, Senator Schumer.
Many of us recognize the need for immediate action to aid our
struggling airline industry and are prepared to do so. We also
appreciate greatly the continuing bipartisan cooperation that is
helping this body address the needs of our country in the wake of the
terrible attacks of September 11.
I am very grateful that the long negotiations in the House and the
Senate over the last several days, along with the White House, have
resulted in a process to provide relief to families who have either
lost a loved one or sustained significant personal injury.
We are also grateful that the legislation provides more support for
essential air services, particularly in many of our more rural areas,
such as Watertown, NY, that are totally reliant on air service which
still comes in to serve those communities.
The passage of this legislation can only be a beginning. We also must
make our airports as secure as possible. I am honored to join in
legislation Senator Hollings and Senator Rockefeller and others are
putting forward to address the security issues so that Americans have
the confidence I know they should have in flying once again, resuming
our normal life.
We also will have to work together to develop a process so the many
businesses that have sustained losses will be able to seek relief in
some expedited process and not get buried and even bankrupted by an
extensive round of litigation. I just learned that the litigation that
was filed following the 1993 bombing of the World Trade Center is still
ongoing. Businesses have no certainty, no resolution of what their
liability, if any, might be. We need to avoid that in the wake of this
tragedy and do everything we can to come up with a process that deals
with the needs of other businesses as well as the airline industry.
I also hope that the assurances we have received with respect to the
airline workers who have been laid off or displaced will be addressed
as soon as possible. I am well aware that a package being considered to
help the workers was stripped out of this bill. We have to revisit it.
It is something that is growing in importance day by day. There are now
at least 74,000 people affected. We expect in the next few days that
number to grow to 100,000. I suggest we look at some kind of an aid
package modeled after trade adjustment assistance to extend
unemployment insurance, job training, support services to airline
workers and other workers who have been directly affected by the
attacks on our country.
We also will have to look at the way our entire transportation system
operates. I am very proud of the way Amtrak stepped in to fill the need
for the movement of passengers and goods. Their ridership is up
nationwide. They have honored airline tickets of stranded airline
passengers and shipped relief and medical supplies. Amtrak has also
made security upgrades on trains and in stations. But we need to do
much more to address the critical needs in the Northeast corridor as
well as the rest of the country.
I look forward to working with my colleagues. I see my good friend
Senator Hutchison from Texas who led the fight on the high speed rail
bonding act. That is just one of the many issues we need to consider as
we look at transportation, again, as part of national defense.
I well recall how President Eisenhower obtained the funding for the
Interstate Highway System because it was part of national defense. Our
highways, our airways, and our railways are all part of our national
defense infrastructure.
Finally, I say once again how grateful we in New York are for the
tremendous and continuing outpouring of support from the American
people. I particularly thank the President for his strong support. I
was overcome by his absolute resolute commitment to rebuilding New York
in his speech last night as well as the other very strong words of
reassurance and resoluteness he delivered with respect to the
challenges we face. I appreciate greatly his leadership and his support
throughout this crisis.
The PRESIDING OFFICER. The Senator from Texas.
Mrs. HUTCHISON. Madam President, I yield 5 minutes from my time to
the Senator from Virginia.
The PRESIDING OFFICER. The Senator from Virginia.
Mr. ALLEN. Madam President, I thank Senator Hutchison, who has been
an outstanding leader on the issue of aviation safety and better
airline quality for many years.
This is not something that Senator Hutchison first started worrying
about after this terrible disaster of September 11. She has been
working on this issue way ahead of time. If more people had listened to
Senator Hutchison years ago, some of the concerns we are now finally
addressing would have been addressed.
I join with many of my colleagues in thanking Senator Hutchison and
all
[[Page S9598]]
those who worked together on this package to provide some stabilization
for air transportation.
Yesterday we had hours and hours of hearings with Secretary Mineta,
who all of us recognize did a great job in coordination with the FAA,
in grounding all flights. They saved lives. They saved lives here in
America with that quick decision.
However, without that decision in response to the terrorist attack,
our airlines would be in much better financial shape today. We are now
in a different paradigm, a different world.
I have heard comments from my colleagues: Why is the Federal
Government involved in this versus other businesses? The main reason
is, the Federal Government controls the air, and the FAA grounded all
the airplanes. It actually said: You must stop business. That decision
has caused losses for the industry. Today we will vote to provide
compensation for those lost revenues resulting from this necessary
decision regarding the safety of our citizens.
We also recognize the absolute essential nature of air travel for our
way of life, for our economy, for commerce, and for our national
security. It has been stated by many others how important it is for our
economy and how many jobs are affected.
In our Commonwealth of Virginia, Reagan National Airport is shut down
today. It remains the only airport in the Nation that is prohibited
from operating. There are 10,200 employees currently out of work, and
then about five to seven times as many employees indirectly affected
who are also out of work.
General aviation fortunately is back, at least at a greater level
than it was previously. But we know that the layoffs are in the tens of
thousands across this country. We recognize the need for safe planes.
Next week we will address airline safety with efforts to make sure the
cockpits are safer and the security is better. Today we will address
the financial losses resulting from the events of September 11.
However, I had hoped that this bill would include assistance for
workers who had lost their jobs as a result of the airlines being
grounded.
Mrs. HUTCHISON. Madam President, my time is taken. I apologize, but
my time is taken.
The PRESIDING OFFICER. Who yields time?
Mr. ALLEN. Senator Rockefeller, may I have 1 minute of your time?
Mrs. HUTCHISON. Our time has been divided.
Mr. ROCKEFELLER. I yield 30 seconds.
Mr. ALLEN. I thank the Senator from West Virginia. I share the desire
to make sure employees who are out of work are also taken care of with
both health and unemployment benefits. I am working with Senator
Carnahan of Missouri to make sure that this is made part of the overall
package. I will cosponsor her bill to provide unemployment assistance,
extend healthcare benefits and to provide for worker retraining. We
need to act today on aid for the airlines so that future job losses are
avoided, and in the future let's make sure we take care of those hard-
working employees who are have already lost their jobs through no fault
of their own. I thank my friend from West Virginia.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
The Senator from Massachusetts is recognized.
Mr. KENNEDY. Madam President, the airline industry's damages from the
September 11 terrorist attacks are immense and unprecedented. Clearly,
we must provide relief for the airlines, but we must not forget the
airline workers and other workers harmed by this tragedy.
Failing to include relief to workers in this bill is a serious
omission. It is essential for Congress to act as soon as possible to
provide support for airline workers.
The toll across the economy from this tragedy will be staggering, and
the economic hardships to millions of American working families will be
severe. Large numbers of workers have already been laid off, and the
working poor will soon become the unemployed poor.
We have already seen tens of thousands of layoffs. Who are these
workers? They are the flight attendants who are single parents raising
their kids on their own; they are the reservation agents trying to make
a living; they are the security clerks, cashiers, and baggage handlers.
I also understand that the airlines are trying to get out from under
the contracts they have with employees. I think this is wrong.
We are assisting the airlines, and they should not leave their
workers high and dry. We need to provide critical long-term
unemployment insurance benefits, training assistance, and health care
coverage for workers affected by these terrorist attacks. Layoffs in
the airline industry alone are expected to total more than 100,000
workers.
Even beyond the issue of fairness, helping workers during a slowing
economy is good economic policy. The unemployment insurance system will
be critical to our Nation's recovery and economic health. Unemployment
benefits help workers bridge the gap between jobs. It also puts the
money in the hands of the unemployed. Unemployed workers spend benefits
rather than saving them, thereby stimulating the economy.
Workers deserve action on this issue from this Congress. This is not
just a matter of labor rights; it is a matter of human rights,
fairness, and decency. Every day we delay, more workers suffer.
American workers are waiting for relief, and we owe it to them to act.
A strong airline industry is critical to the national economy. We
need to keep the airlines flying. But we also need to provide critical
assistance for the airline workers and other workers who have lost
their jobs as a result of this disaster. I call on my colleagues and
the President to address this matter as soon as possible. No one has
been more affected by this than our State of Washington, and Senator
Murray has spoken frequently about this, as well as Senator Cantwell.
I yield a minute to the Senator from Washington and the remaining
time to the floor manager.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Madam President, I thank my colleague from
Massachusetts. I thank all of our colleagues who have worked together
in a very bipartisan manner over the last week to address the critical
issues coming at us. I know we need to help the airline industry, and
that is why this bill is important.
I remind my colleagues that thousands of workers were left out of
this bill. I have 30,000 employees in my home State of Washington at
Boeing who have been left out of this bill. They are just as patriotic
and they have worked just as hard. They deserve our attention just as
much. We should not forget them when we are taking care of the owners
of these airline companies.
It is the workers who go to work every day who make this country
great and strong. We need to make sure we have a commitment to them in
the coming week to put together an aviation package that includes
employee assistance for those who have made this country what it is.
I thank my colleague from Massachusetts and Senator Cantwell from my
State, and other Members, such as Senator Carnahan. I pledge my support
to make sure this Senate doesn't forget the workers as we put together
the aviation package that has been promised. I thank my colleague from
Massachusetts, and I yield the floor.
The PRESIDING OFFICER. The Senator from Texas is recognized.
Mrs. HUTCHISON. I yield 3 minutes to the Senator from Pennsylvania.
Mr. SPECTER. I thank my colleague from Texas. I am encouraged to see
the Senate and the House moving so promptly on this legislation to keep
the airlines functioning. The terrorist attack is really an attack
against the United States as a whole, and when we have losses directly
attributable to that attack, it seems fair to me that the entire Nation
should sustain those damages. What we are doing today with the cash
grant and especially the loan guarantee will keep the airlines
operating, which is very important for the lifeblood of our country and
very important for an economic recovery.
US Airways, illustratively, needs the loan guarantees in order to get
financing to keep operating. US Airways is
[[Page S9599]]
only one of many carriers across the country, but it illustrates the
problem and it illustrates the issue especially pertinent to my State
of Pennsylvania, which has some 17,000 US Airways employees dependent
upon their jobs. This is a very, very important matter for
Pennsylvania, and a very important matter for America.
This legislation also establishes a very appropriate procedure for
compensating the victims on a program administered by the Attorney
General's office without going through the long litigation process.
However, it is only a first step.
There is more to be done on airport security, on security within the
airplanes, on compensation for the workers with some 100,000 already
having lost their jobs, and with the ripple effect on hotels, on the
airport complexes, on restaurants, on tourism, and on the airports
which sustain themselves by having the shops now unfrequented by
customers because only ticketed passengers can get within the area.
How much time remains on my 3 minutes?
The PRESIDING OFFICER. The Senator has 45 seconds.
Mr. SPECTER. I yield back the time.
The PRESIDING OFFICER. Who yields time?
Mr. ROCKEFELLER. I yield 2 minutes to the Senator from Vermont.
Mr. LEAHY. Madam President, I thank the Senator from West Virginia.
The heart of every American aches for those who died or have been
injured because of the tragic terrorist attacks in New York, Virginia,
and Pennsylvania on September 11th. Our first priority should be
ensuring that their needs are met and that they receive adequate
compensation.
At the same time, the airline industry of this country is in grave
danger of collapse. The industry has announced more than 100,000
layoffs. Insurance companies have reportedly contacted the airlines
about lowering the terrorist-related protections in their policies. And
they have warned that they are running out of cash. If Congress does
not pass this legislation today, it is likely that all of our Nation's
air carriers would cease service next Wednesday.
The bipartisan, bicameral legislation we are considering today
provides $5 billion in direct grants to cover the cost to the airlines
from the closing of all the nation's airports after last week's
terrorist attacks. The bill also provides $10 billion in loan
guarantees to help the airlines through their cash crunch, funds to be
distributed within 14 days by a four-member Air Transportation
Stabilization Board. Further, it extends the existing War Act, which
protects airlines from liability during wartime for overseas flights,
to cover domestic flights and include terrorist acts. Finally, it
provides that the liability of the airlines involved in the terrorist-
related airline crashes on September 11, 2001, will be limited to the
amount of the insurance coverage they have for such instances, and all
legal cases stemming from these incidents will be consolidated in the
United States District court for the Southern District of New York.
Most importantly, working with Majority Leader Daschle, Republican
Leader Lott, Speaker Hastert, Congressman Gephardt, and Senators Hatch,
Kohl, DeWine, Schumer, and Clinton, we have established a Victims
Compensations Program to provide expedited payments to victims and
their families. To be eligible for compensation, applicants will need
to provide information about the harm they suffered or death linked to
the terrorist attack, but they will not be required to prove negligence
or liability. It is our responsibility to provide fair compensation to
those most affected by this disaster. We have devised a plan that means
prompt filing, quick review, and prompt payments to victims and
families.
The Department of Justice will supervise the Victims' Compensation
Fund that will be administered by a Special Master. The Special Master
will make a final determination of an applicants eligibility and level
of compensation within 120 days of receiving a claim. All payments must
be paid within 20 days after the determination. This is a simple and
fair approach to put the victims and their families first. These
payments will be tax free. Filing a claim under the program will
preclude other civil remedies.
This program is targeted to help the neediest victims and their
families. When making a determination, the Special Master will take
into account any life insurance, death benefit, or other government
payment received by the victims and their families.
The victims in this tragedy and the airline industry are in need of
relief. The terrorists will win if victims continue to suffer and the
airlines go under. Establishing the Victim Compensation Fund and giving
the airlines the capital they need to continue operating are crucial
first steps in our national healing process. I thank the leadership of
both parties in both Houses of Congress for their cooperation in moving
this essential legislation forward.
Madam President, again, the heart of every American aches for those
who have died or have been injured because of the terrorist attacks in
New York, Virginia, and Pennsylvania on September 11--and due to the
ripple effect out to New Jersey and Connecticut and Maryland and the
District of Columbia. It has been terrible. I think we have to ensure
that the needs of those who suffered most directly are met, that they
receive adequate compensation.
We also know that the airline industry in the country is in danger of
collapse. They have announced, I believe, around 100,000 layoffs.
Insurance companies reportedly have contacted airlines saying they will
lower terrorist-related protections in their policies. They have said
they are not going to be able to pay their bills. If we don't do
something, we can literally see the terrorists shutting down the
airlines next week. We have worked with Senators Daschle and Lott,
Speaker Hastert and Congressman Gephardt, Senators Hatch, Kohl, DeWine,
Schumer, and Clinton, and we put together a victims' compensation
program to provide for victims and their families. It is going to be
simple. It is a speeded-up process. In fact, the payments will be tax
free, with prompt filing, quick review, and prompt payments to victims
of families. We literally had children who kissed their parents good-
bye in the morning and came home at night and found that they were
orphans, and the mortgage is due in 2 weeks. We have to do something to
help them. We can.
The victims in this tragedy are in need of relief. The airline
industry is in need of relief.
The terrorists will have even a greater victory if we do not help. We
can help.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. ROCKEFELLER. Madam President, I yield 10 minutes to the senior
Senator from West Virginia.
The PRESIDING OFFICER. The senior Senator from West Virginia has 15
minutes of his own time under the agreement.
Mr. ROCKEFELLER. Madam President, I revise my statement simply to say
the senior Senator from West Virginia has 15 minutes under the
unanimous consent agreement.
The PRESIDING OFFICER. The senior Senator from West Virginia.
Mr. BYRD. Madam President, the distinguished majority whip wishes me
to yield time to him. How much time does he need?
Mr. REID. Three minutes.
Mr. BYRD. I yield 3 minutes of my time to the Senator.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Madam President, I received a letter, as did all Senators,
today addressed to the Honorable Tom Daschle, majority leader, and the
Honorable Trent Lott, minority leader, of the U.S. Senate. The letter
reads as follows:
Dear Senators: The Association of Trial Lawyers of America
(ATLA) commends the United States Congress and President Bush
for their leadership and decision to put families victimized
by our national tragedy first and to ease their pain by
expediting appropriate relief to them through the ``September
11th Compensation Act of 2001.''
ATLA agrees with you that extraordinary situations demand
extraordinary response.
At least seven thousand families are hurting more than any
of us can imagine. And, because the first priority of every
American should be prompt and full justice for the thousands
of families who know first-hand the unspeakable horror
visited upon the world on September 11, 2001, members of
[[Page S9600]]
ATLA will provide fine legal services to any family wishing
to pursue justice through the fund established by this
unprecedented, humanitarian legislation.
ATLA believes that 100% of the compensation from the fund
should go directly to these families.
The officers and Executive Committee of ATLA have
volunteered to be the first attorneys to provide legal
services free of charge under this program.
God Bless America.
Sincerely,
Leo V. Boyle, President, on behalf of the 60,000 men and
woman of ATLA.
The PRESIDING OFFICER. The Senator from West Virginia.
Mr. BYRD. Madam President, the bill currently before the Senate
provides $5 billion in immediate direct cash assistance to the airline
industry. It also provides up to an additional $10 billion in loan
guarantees for the airlines. This bill is not simply an authorization
bill. It is also an appropriations bill which provides funding over and
above the $40 billion Emergency Supplemental Appropriations Bill that
the Senate passed one week ago today.
The airline industry is essential to this Nation's commerce. It
produces about $125 billion annually and creates work for thousands of
manufacturers and other companies. The Federal Government cannot allow
this industry to fold without seriously disrupting the United States
economy. That fact is not lost on this Senator.
However, we have now reached an important turning point in the
relationship between the Federal Government and the airlines, and this
should not go unnoticed. As of this day, the airlines are now required
to live off the generosity of the general treasury. We are about to
grant them several billion dollars of assistance, not from the Aviation
Trust Fund, not from any ticket taxes from airline passengers, but from
the general treasury. We are talking about money from people's income
taxes, including the income taxes of millions of Americans who did not
board a plane last year, who will not board a plane this year, and who
will not board a plane next year perhaps.
Twenty-three years ago, the Senate passed the conference report on
the airline deregulation bill on October 14, 1978 by a vote of 82-4, I
believe. I was Majority Leader at the time. I was among the 82 Senators
who voted for that bill. And as I have mentioned on the Senate floor
many times, I have regretted that vote ever since.
My colleague at that time was Jennings Randolph. Jennings Randolph
voted against deregulation. I voted for deregulation. He voted the
right way at that time, and I voted the wrong way. I regret that vote
because ever since deregulation, numerous airlines have pulled out of
West Virginia and other rural states altogether. Many of them pulled
out immediately following the vote. My constituents and millions of
other Americans who live in smaller communities have been left with
infrequent air service at astronomical prices. Indeed, today, it is
often cheaper to fly from Washington D.C. to London, England, than it
is to fly from Washington D.C. to Charleston, WV. The quality and cost
of service to many of our smaller airports in West Virginia and across
the Nation are even worse.
Yesterday, as part of a Transportation Appropriations Subcommittee
hearing with Secretary Mineta, I expressed my view that we should not
be providing the airlines with billions of dollars from the income
taxes of hard working Americans without requiring the air carriers to
provide a reasonable level of service to those Americans. Now that this
industry must live off the generosity of the U.S. taxpayer, at least
for a while, I think we have a responsibility to ensure that the
taxpayers are well served. But today, we find that the airlines are
cutting back service and eliminating cities from their national network
at the same time they have their hands out on Capitol Hill.
I recognize that the airlines find themselves in such precarious
financial condition because of a recent tragedy of massive proportion.
However, the airlines were not doing so well before that time. I am
determined to make sure that the airlines do not use this incident as a
rationale for abandoning or dramatically reducing service to
communities that depend on that service to connect with the national
economy.
Toward that end, I want to call the attention of the Senate to a
critically important section of the bill. Under this bill, the
Secretary of Transportation is granted broad new statutory authority to
require an airline that receives direct financial assistance under this
act to continue to provide service to any city that it was serving
prior to the tragedy of September 11.
The bill also grants the Secretary the authority to require any
airline taking assistance under this act to enter into agreements to
ensure that all communities that had scheduled air service before
September 11 continue to receive adequate air service.
These provisions, if applied appropriately, will ensure that the
small cities and the rural airports of America are not cut off from our
national aviation system as the industry endures a downturn. The
Committee on Appropriations, which I chair, will monitor carefully how
Secretary Mineta implements these critically important provisions. He
has been granted important new powers in this time of crisis, and I
expect him to use these powers. The committee will also monitor
carefully the actions of the airlines when it comes to discontinuing
routes and reducing service. We must see to it that the small
communities of our country are not relegated to the status of an
economic backwater as the jets keep flying from New York to Los Angeles
to London and to other far away ports.
I understand there are discussions that additional Federal assistance
may be needed for the airlines in later bills. The airlines should be
on notice and the Department of Transportation should be on notice that
if the provisions in this bill are not applied appropriately, and we
see a pattern wherein the small communities of our Nation are not being
treated fairly, we will be back with stronger legislative measures to
address this problem. This issue will not go away with the passage of
this bill.
As we stand poised to hand the airlines billions of dollars in
general revenue tax dollars, we must ensure that taxpayers in all
communities, small and large, have access to reasonable and affordable
air service. During this time of national crises--during a time of
war--we should require that there will be air service to all parts of
America to ensure that there is mobility for all Americans.
I want to thank my colleague, Senator Rockefeller, for the leadership
he has demonstrated in this area of legislation. He has done a great
piece of work. He is highly dedicated to the service of his
constituents, who are my constituents, but in thinking of our
constituents we are also thinking of Americans across this country who
live in rural areas and who have been deprived of fairness in service
and in connection with costs in flying.
I yield back the remainder of my time.
The PRESIDING OFFICER. Who yields time?
Mrs. HUTCHISON. Madam President, I yield 2 minutes to the Senator
from Alabama, Mr. Sessions.
The PRESIDING OFFICER. The Senator from Alabama.
Mr. SESSIONS. Madam President, I appreciate the work of our
leadership in this Senate working together to produce legislation that
each day, since this tragedy occurred, we have been virtually unanimous
on. I want to keep that unanimity going. I express my appreciation to
Senators Daschle, Lott, Nickles, Reid, and the others who have worked
on this legislation. I know there is a belief that there is a critical
time period, and apparently there is, an insurance problem of
monumental proportions that needs to be dealt with promptly.
However, I do believe, as Senator Fitzgerald from Illinois has said,
we are rushing this matter, that this bill is not a perfect bill. It is
far from a perfect bill. Maybe it is approximately correct, but we do
not know all of that yet. I am not happy with how fast this is moving
and how much money we are dealing with. I want to support our
leadership. I know they have hammered it out. I know they have made
some progress. I know they have made some agreements. I know Senator
Nickles has worked hard to bring as much accountability as he could in
the time he had to make this a reality. So I salute them for it, but I
am not convinced we are doing it the right way.
I was pleased to see trial lawyers say they would do work for free,
but I am
[[Page S9601]]
not sure that, in the way we have crafted the bill, a client still does
not need a lawyer that is loyal to them and that is paid by them. I
would like to see us create a way to compensate people simply by who
they are. If they are the widow of a person who has lost his life, they
can make a claim and certify that and get their payment without any
fees needing to be paid. Maybe we could do that in this kind of mass
tort. We have not had time to think that through.
I know this bill is probably moving on to passage tonight. I am
troubled by it. We are going to need to do some work on it in the
future, and I expect we will be coming back and revisiting this. I
think that should be made clear.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
The Senator from Texas.
Mrs. HUTCHISON. I am going to finish our 30 minutes of time by saying
this is not a perfect bill. There are areas we have not addressed but
that we will address in the future. Since September 11, 2001, a lot of
things have been thrown at us, and we are going to handle every one of
them as they come. We will keep the airlines flying. We will try to
minimize the damage to the economy of layoffs from the airline industry
and all the other people who are laid off from their jobs. We will take
it one step at a time.
Senator Rockefeller and I have worked hand-in-hand on this issue and
on the security issue that we will have on the floor next week or the
week after, because security is what will make the flying public feel
safe in our skies. So we are going to address this issue and keep the
airlines financially secure in the interim period while we are getting
that security bill passed so America will not be in any way hampered in
our freedom and our ability to have commerce and business as usual in
our country. That is what we are all trying to accomplish.
I yield back the remainder of my time.
The PRESIDING OFFICER (Mrs. Lincoln). The Senator from Oklahoma.
Mr. NICKLES. I yield to the Senator from West Virginia.
Mr. ROCKEFELLER. I commend the majority leader for his hard work in
putting together an airline stabilization bill that will save our
nation's airlines and our air transport infrastructure. I will strongly
support this bill without amendment.
The terrorists who launched those despicable attacks on September 11
took thousands of American lives, and did billions of dollars of
damage. It has also become clear in the past 10 days that they dealt a
body blow to the U.S. airline industry, on which virtually all of our
citizens depend to one degree or another.
Demand for air travel has virtually collapsed in the past week. Last
weekend I flew back to West Virginia, and on the return flight Sunday
night--usually a crowded flight from Charleston to Dulles--I was the
only passenger on the plane. Many of my colleagues have mentioned that
they've had similar experiences in the past ten days. Flights are
departing West Virginia airports with a load factor of 25 per cent--
only one in four seats filled. Unfortunately, this is not, like last
week's closure of the New York Stock Exchange, a temporary phenomenon.
Based on past air disasters or international conflicts--none of which
was of the same massive scale as last Tuesday's attacks--airlines are
predicting that passenger traffic will be down by almost half for the
remainder of this year, and will take until next summer to return to
normal levels. And those are optimistic estimates.
This kind of crisis could do irreparable harm to the ability of
America's airlines to continue in business. Airlines lost $300 million
each day that they were shut down last week. They are set to lose
billions more in the coming months. Their insurance rates have shot up,
with some airlines telling us of a 600 percent increase in their
insurance rates. Coming on top of what was already a difficult outlook
because of our slowing economy, the nation's airlines--main line
carriers and regional carriers alike--could be in bankruptcy within a
few weeks and possibly out of business within a few months. Already we
are seeing the first signs: a round of massive, painful layoffs for
nearly 100,000 of our nation's hardworking airline employees. And huge
cutbacks of around 20 percent to most airlines' schedules.
Some people have said, well, this is the market, and it's not the
American way to interfere with the market. But I've been pleased, as
chairman of the Senate's Aviation Subcommittee, to see a broad
consensus among my colleagues that the air transport industry is not
just a huge business and employer, but it's also a critical element of
our nation's infrastructure. Nowhere is that more the case than in the
smaller states and communities like West Virginia. When people think of
the airline industry, they usually think of big hub airports like
Hartsfield and O'Hare. But airline traffic is just as important--maybe
more important--to smaller communities like Beckley and Bridgeport.
Safe, convenient and affordable air service represents an important
element of our efforts to attract development to our state. It's an
important connection that allows our citizens and our businesses to
overcome our state's historic isolation created by our mountainous
terrain.
And when I see planes flying with one passenger, and learn that
carriers are cutting back on their schedules, and hear that several
carriers could be in bankruptcy within two weeks, I know that the first
communities to be hit will be small communities like those in West
Virginia that are at the end of the food chain, so to speak. That would
be tragic. It would reverse the efforts our communities have made to
attract and retain air service, and turn their residents into aviation
``have nots.'' It would also set in motion the slow implosion of the
U.S. airline industry, which would spread to larger hubs and airports
as well. And finally, it would give the terrorists who perpetrated last
week's heinous attacks the ultimate victory, as their actions would
lead to a severe curtailment of America's freedom of movement and
mobility.
It is the shared consensus of this body that cannot be permitted to
happen, and that has driven our remarkable efforts this past week to
put together a stabilization package for our nation's airlines.
It will contain up to $5 billion in immediate credits to reimburse
airlines for the revenues they lost when the government shut down U.S.
air space last week. It will also contain $10 billion in loan
guarantees so that our airlines can continue to obtain financing in the
coming months.
It will limit airlines' liability for collateral damage incurred as a
result of last week's terrorist attacks up to the amount allowable
under their insurance policies--a key provision because our airlines
might otherwise not be able to obtain or afford insurance.
It will set up a victim's compensation fund for the families of the
innocent victims of last week's despicable attacks.
It will provide $120 million in additional authorization authority
for the Essential Air Service program, a key element in preserving air
service to smaller communities.
This package is an important first step in stabilizing the U.S.
airline industry and ensuring that air service to communities across
the nation survives this crisis. But it does not address all the needs
that this crisis has created.
One important issue we will need to take up in short order is the
plight of the nearly 100,000 airline workers who will lose their jobs
as a result of this week's cutbacks. We have already begun to see
airline layoffs in West Virginia. Excellent workers who expected a
promising career in a growing industry, until terrorists hijacked four
planes and frightened Americans out of the skies. We must take measures
to address their needs. We provide special assistance to American
workers who have been displaced by foreign trade; we must provide the
same level of assistance to American workers who have been displaced by
foreign terrorism.
We must also be prepared to look at the needs of related industries,
as well as the future needs of the airline industry. Many related
industries--aircraft manufacturers, travel agents, and various travel-
related businesses--have already begun to feel the effects of this
attack. We will have to look carefully at the real needs of those
industries, and be prepared to take bold measures where they are needed
and appropriate.
[[Page S9602]]
One thing is certain: the survival of America's airlines is a key
element of any solution. Their needs are real and urgent, and I
congratulate the majority leader on his success in putting together a
stabilization package that will address them.
The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
Mr. NICKLES. I thank the Chair.
(The remarks of Mr. Nickles pertaining to the submission of S. Con.
Res. 73 are located in today's Record under ``Submission of Concurrent
and Senate Resolutions.'')
Mr. NICKLES. Madam President, I have worked with some of our
colleagues on the underlying bill that deals with assisting the airline
industry to try to make a significant and positive impact, and I
compliment both Democrats and Republicans, because we have worked
together, and I think we are passing a bill tonight that will provide
needed assistance to the airline industry.
This bill has several provisions some of our colleagues are somewhat
familiar with, some maybe not, but it has a provision that provides for
$5 billion in cash assistance. Some people said that is too much.
Actually, last Friday we were looking at a bill that was two and a
half. The airline industry generates revenues of about $2 billion per
week, and this bill provides $5 billion. Well, they were shut down for
2\1/2\ days, but certainly when they started again they had significant
losses, and this $5 billion is an attempt to offset the losses that
will be incurred not only for the shutdown but for the resumption of
service, and that is for the time period from September 11 through
December 31.
Also, there are losses that have to be incurred. I would love to see
ridership come up to a very full volume in a very short period of time
and maybe that $5 billion would not be necessary. In all likelihood it
will be. The legislation also provides for $10 billion of loan
assistance. Some people have asked for details, but we left the
regulations up to OMB, and some people have disputed whether it be cost
share, whether it will be a guaranteed loan amount.
When we did the steel loan guarantees, that this Senator did not
support but we put a percentage must be required, the Federal
Government did not guarantee 100 percent. The Federal Government
guaranteed up to a percentage, and I hope that would be the case in
this bill. So it would not be a 100-percent Federal loan guarantee but
up to 80, with those regulations to be determined by the Office of
Management and Budget. They have 15 days to do so from date of
enactment.
The legislation also has about a page and a half, or two pages,
dealing with essential air service. It is my thought that should not be
in the legislation, and it is because Senator Byrd and Senator
Rockefeller and others wanted to have it and said the Secretary should
make efforts to endeavor that communities that now have assistance in
Federal air service would continue to receive it. In my opinion, it
should not have been put in, but it is in and I am not that upset. It
does give some discretion, but in some of these communities we have
airplanes flying with two or three people on them and they cost a lot
of money. They cost the airlines and taxpayers a lot of money, and I
question whether we should mandate that it continue.
The language we have in the bill is less than a mandate. It does have
some discretion, so hopefully common sense will prevail. That is not a
particularly big provision.
Most importantly, the bill does provide some limitation on
liabilities for the air carriers. If we did not have that, they
probably would not be able to buy insurance. They probably would not be
flying in a month. We did not want that to happen so we did put some
liability protection, some limitations there. Carriers would be liable
on September 11. The limitations for liability will be for the amount
of insurance they have. So that was pretty well agreed upon.
The prospective liability, where the Government would assume
additional liability if there were another act of war or terrorism, was
pretty well agreed upon.
We also passed legislation, and it begins on page 19 and goes through
page 30 in this legislation, called victims' compensation. It basically
says that victims and/or their family survivors, people who were killed
by the terrorist act of September 11, may receive financial assistance
or at least have legal recourse. They can do it either by suing in a
Federal district court or they can do it through a new system we are
now creating in this legislation called the special master.
It was my hope this would not be included in this legislation, that
we would defer it until we had a little more time to study it. This is
very complex law. It deals with the State of New York law, it deals
with Federal law, it deals with liability, and the liability of not
only the airlines but also the building, the port authority, and other
individuals and governments. It is very complicated and very complex.
Although I think the committees and the other people who worked on it
did a pretty good job, the special master has enormous responsibility
under this legislation, to be making determinations on what family
survivors will receive, what injured members and individual will
receive.
I am not against having a victims' compensation section, but when we
put this together in a short period of time, I am not sure we did it
the best way. I am not trying to be critical, and I have assurance from
proponents of this, as late as last night: If we find it is in error
and it needs adjustments, we will revisit it. I compliment my
colleagues because we have operated in a bipartisan spirit, and we
should continue to do so. That is vitally important. We did it last
week; we did it this week.
Some people said we want to rewrite unemployment compensation laws
and make everybody whole on unemployment compensation because of the
airline employees, because of restaurant employees, et cetera. We have
to be cautious. The unemployment compensation system can be enormously
expensive. We have an unemployment compensation system providing
benefits in most cases for 26 weeks. I don't know that has such urgency
we need to address it in the next week. Some said we need to do this
next week. Almost everyone in every State of the Nation has
unemployment compensation that will last at least for 6 months.
We have made good progress in providing stability for the airlines.
They will be able to buy insurance; they will be able to continue
flying. We provided cash assistance and provided loan guarantees to get
them through, bridging this very difficult time as a result of the
terrorist act and tragedy that happened on September 11.
I encourage my colleagues to vote in favor of this legislation.
For the information of our colleagues, a lot of people are wanting to
get out of town. It is my intention to yield back the remainder of time
and commence the rollcall in a very short period of time.
Mr. ROCKEFELLER. Madam President, the Senator from the State of
Oregon has up to 5 minutes.
Mr. WYDEN. In a few hours the U.S. Congress is going to respond to
the horrible tragedy in New York in an unprecedented way. The U.S.
Congress is going to vote to send billions of dollars to the airline
industry, while not making any funds available to the scores and scores
of other businesses across this country affected by this tragedy that
also teeter on bankruptcy.
The process that the U.S. Congress is using is also unprecedented.
The number being used to send these billions of dollars of taxpayer
money to the airline industry comes from the airline industry itself.
There has not been an independent, third party review of the numbers
and the projections on which this legislation tonight is based. It is a
leap of faith. The Congress tonight is responding to the airline
industry's assertion that because this tragedy is so dire and the
circumstances so enormous, we should waive the traditional process of
saying that someone independent should evaluate a piece of legislation
such as this involving billions and billions of dollars.
But it is also unprecedented, the horror and the tragedy that the
Congress must address. Tonight, in what has been one of the hardest
decisions I have had to face, I am going to vote for this legislation
because of one addition that has been made, and I am pleased to
announce it tonight. Senator Daschle, the majority leader, has worked
so hard on this legislation; Senator Hollings, chairman of the Commerce
[[Page S9603]]
Committee, has done yeoman work on this bill; Congressman Doggett; and
a variety of Members have indicated they expect the General Accounting
Office to give a briefing to the U.S. Congress by September 28 on this
legislation.
I make it clear tonight, if it appears on September 28 or in the days
that succeed that briefing that this legislation was in excess of what
the airlines needed, I am going to come back on this floor and do
everything in my power to send this money to the scores of other
businesses across this country that teeter on bankruptcy tonight. This
is unprecedented, first, because of the tragedy; second, because one
class of those affected in the airline industry is receiving help while
others are not; and third, because there has not been an independent
analysis of what the claims actually constitute and what funds are
truly needed.
Because the circumstances are so dire, the Congress is going to vote
for this legislation over the next few hours. I want the Congress to
know, that briefing on September 28 will be critical because it will be
our first chance to get an objective analysis of whether the industry
needs this sum of money and needs it for the claims that are being
made.
I wrap up by saying in my view Senator Rockefeller and Senator
Hutchison have done a first-rate job on this legislation. This is, as
we all know, just the beginning of the debate about how to deal with
the financial consequences of the horror in New York, but it is a
particularly difficult choice the Congress is making tonight. I assure
my constituents and others who are following this debate that the way
this money is going to be spent is something that is going to be
scrutinized with as much care as any subject that has ever come before
the U.S. Congress.
I yield the floor.
Mr. REID. Madam President, it is my understanding that all time is
going to be yielded back on this matter.
Mr. ENZI. I rise to make a few remarks concerning the Air
Transportation System Stabilization Act.
First, I would like to associate myself with the comments by the
Senator from Alabama, Mr. Sessions and the Senator from Oklahoma, Mr.
Nickles.
I know we need to take immediate action to keep the airline industry
in the air. The last few days have taught us that air travel is the
heart of our economy. Many businesses have been hurt by the events last
week. I am disappointed that help has not been offered particularly to
the small businesses. But I realize that those businesses will be out
of business if air travel ceases or is greatly reduced. Airlines are a
lifeline for many occupations.
This morning I had many concerns about this bill. I am pleased that
many of my suggestions were taken and now appear in the bill. Other
parts of this bill can and must be reworked in the days to come.
I am pleased at the recognition that will assure essential air
service, help to airlines that serve small, rural communities
throughout the nation.
I am pleased that we remembered the regional air carriers and
proportionally helped them.
I understand the reluctance of the insurance companies to continue to
insure air carriers, because of the uncertainty of the exposure, so I
am pleased that an insurance provision was provided.
I am pleased that provisions were put into the bill that would remove
concern and provide assurance that the grant money will not be golden
parachutes for highly paid executives.
I know the bill now has provisions for audits to be sure the money is
spent within the criteria set out. I would feel more comfortable if the
audits were mandatory instead of optional. Taxpayer money always comes
with strings.
I understand the need for expediting compensation to victims, but I'm
not sure that we have done that. Perhaps we have just opened up a trial
lawyer's dream. I have been assured that section will be reworked to
give assurance that the money will go to the victims and not just to
attorneys, and that the taxpayer won't be the one providing all the
compensation. I had hoped that the Federal obligation would be
available only for those who took the expedited avenue of resolving
their loss using the Special Master.
I applaud my colleagues and the Administration in expediting aid to
the nation's airlines under this bill for damages arising out of the
September 11, 2001 terrorist attack. This initial funding will provide
the resources necessary to assure continuity and stabilization of the
airline industry. By including direct cash assistance, loan guarantees,
increased air transportation safety, and prospective and prior
liability provisions, the bill will ensure the safety of the American
public and restore confidence in our economic foundations. The
provisions of this bill are designed to restore the confidence of
airline customers and industry investors and provide a bridge of
assistance to the new environment in which the industry will need to
operate.
I am pleased that the bill states that the U.S. Department of
Transportation Secretary should take appropriate action to ensure that
all communities, both rural and urban communities, that had scheduled
air service before September 11, 2001, continue to receive adequate air
transportation service and that essential air service to small
communities continues without interruption. In addition, the bill
authorized an appropriation of $120 million for the Essential Air
Service program. This additional funding in the EAS program will
greatly benefit the rural communities in Wyoming.
Resumption of normal air travel is essential for our commerce and the
mobility for our way of life. We have to act to keep our airlines
flying without throwing the free market out of the window. These
businesses need to show that their requests for assistance are tied to
the recent terrorist attacks and not debts incurred prior to September
11, 2001. They also need to show that the financial assistance they
receive will be used wisely, keeping their planes flying and their
employees working.
I believe that the airlines should submit a business plan to the U.S.
Department of Transportation to justify why they need the grant funding
and loan guarantees and what the funds will be used for. Within the
business plan, the airlines should state specific provisions that
executive management of the airlines should not receive pay increases
greater than the cost-of-living adjustment and they should not receive
any bonuses due to the funding allocated to them by this bill. I
believe this emergency funding for the airlines should help all airline
employees, not just the executive management.
I have been assured there will be specific criteria when directing
federal funding to the airlines in the form of a loan guarantee. For
example, the bill gives the President the authority to issue the $10
billion in loan guarantees to the airline industry subject to terms and
conditions as he seems necessary. We must assure there is no abuse and
that the bill protects the federal government who is the U.S. taxpayer
from incurring costs from the possible defaulting on the loans.
Traditionally, loan guarantee programs ensure that the General
Accounting Office, GAO, can exercise its authority by auditing the
business that receives a loan guarantee. The administration should
include a provision that mandates the GAO act as the auditor of this
loan guarantee program. At present, an audit may be conducted by the
GAO and U.S. Department of Transportation if the Comptroller General
and Transportation Secretary deem necessary. We have to ensure that the
funds are spent accordingly in relation to the intended purpose of this
bill.
Furthermore, the bill should more directly address the higher costs
incurred by commuter and short-haul carriers and issues arising from
recent changes in air transportation availability to small- and medium-
sized communities. These regional airlines provide the only air service
between the major airports and the more than a hundred small- and
medium-sized communities in the West.
I am committed to supporting an economically strong airline industry
for the West and the nation. Due to last week's tragic events, we have
realized that interdependence is key to keeping our economy strong, if
planes are flying, then the motels are being occupied and the
restaurants are being utilized. I look forward to supporting my
colleagues in restoring public confidence in the fact that the United
[[Page S9604]]
States has the strongest and safest airline system in the world.
____________________